Calculating Vacation Pay per Payroll
Each position has a vacation accrual rate. This rate is used to calculate the amount of vacation pay that should be deposited (credited) to the Vacation Bank of that employee.
The Formula for this calculation is:
Banked Vacation Pay = Gross Pay X Vacation Pay Accrual Rate
Let’s use John as an example. Johnny earned 12,500.00 PhP in a two week pay period. His Vacation Pay accrual rate is set to 4%.
His banked Vacation Pay for this pay period will be:
Banked Vacation Pay = 12,500.00 PhP Gross pay X 4% = 500 PhP
Please note that computations may vary per company. Other companies in the Philippines use the base pay as the basis instead of the gross pay.